How Autotrading came to be!
When you choose to use an autotrading software in your forex trading activities, it will be like getting into partnership with a forex trader who is smart, unemotional, ever-vigilant, and logical. This is the kind of a trader who will always execute his trades when the chance is available and bag the right amount of profit without risking much.
Autotrading started when online retail trading was established in 1999. This was when the internet based companies came up with retail forex platforms that offered fast ways for individuals to short and long in the spot forex markets.
For larger retail traders, they autotraded forex contracts in the Chicago Mercantile Exchange in the 1970s
How does the autotrader work?
The autotrader is trading software available commercially. The software takes an analysis of the price charts and other activities in the market. The software will give signals that are inclusive of the spread discrepancies, news and the price trends. All this is done to determine the currency pair that will be profitable.
This kind of trading is also known as the black-box trading, robot trading or the algorithmic trading.
What are some of the pros of using this method of trading?
One aspect that will make you love this kind of trading is the fact that you will be taking part in an emotionless trading activity. There will be limited psychological influences when evaluating when to trade. The decisions you make while trading will be emotionless and will be consistent.
When using an auto trader, you can run multiple accounts since you can mirror the results. The results established by software can be replicated to multiple trading accounts.
When you trade using an autotrader, you will save time on your trading activities. This is because you will not be required to monitor the account throughout.
Major Types of Automated Forex Trading
There are two known and majorly used types of automated forex trading.
Fully Automated Trading
There is the system that is fully automated and is otherwise referred to as the robotic forex trading. This is the method that would be termed as the trading machine or the black box kind of trading. In this one, orders are executed with respect to certain algorithms.
This is where the developer of the software has at first come up with the script on the aspects of the order like the price, quantity and when to take an order. The only way that the users can change the properties would be changing parameters like the risk parameters, stop loss and take profits, as well as, the lot size.
Signal Forex Generator
In this one, you are required to take the orders manually that are given by the trading system which has an in-built algorithm. This one will show the potential exit and entry points.